The Vital Role of Gas Tax Indexing

Without an automatic adjustment for gas taxes, revenue from the tax declines due to increasing fuel efficiency standards while road maintenance and construction costs increase due to inflation. Witness Wisconsin's woes.

2 minute read

July 18, 2017, 10:00 AM PDT

By Irvin Dawid

Gas Pump

Daniel Korzeniewski / Shutterstock

Like most states, Wisconsin relies to a great extent on user fees, particularly the gas tax, to fund its roads. [How does your state pay for its roads?]

But that share has been declining since the legislature abolished the practice of automatically adjusting its gas tax in 2006, now stuck at 32.9 cents per gallon for over 11 years.  [When did your state last increase its gas tax?]

Furthermore, it's not only causing transportation headaches for the legislature, it's also holding up the budget process, reports Marti Mikkelson for WUWM (Milwaukee Public Radio–listen here).

“Up until that point, there had been an automatic increase based on several different variables and there was always a little more money coming in. Once you eliminated those automatic increases, then you essentially ended up with a stagnant revenue pool,” Wisconsin Taxpayers Alliance spokesman David Callende says.

Republican Gov. Scott Walker has not been helpful. "When he took office in 2011, he made it clear, that there would be no increases in registration fees -- or gas taxes -- in his budgets," adds Mikkelson.

Unlike some states, like California, where hiking taxes often comes down to a partisan divide, in Wisconsin, a Republican trifecta, an "ideological split between the GOP leaders in the Assembly and Senate complicates the search for answers," according to JR Ross of

Two user fees not taken off the table are adding road tolls near the state borders, with the idea of catching out-of-state motorists, and adding a vehicle-miles-traveled fee for heavy trucks, aka weight distance tax, both described here last month.

A proposal to add a sales tax to fuel purchases and reduce the gasoline excise tax posted in May apparently failed.

Wisconsin has plenty of company

According to a June 28 publication by the Institute on Taxation and  Economic Policy (ITEP), "thirty states and the federal government levy fixed-rate gas taxes where the tax rate does not change even when the cost of infrastructure materials rises or when drivers transition toward more fuel-efficient vehicles and pay less in gas tax."

However, it's not always easy legislating automatic increases to the gas tax, as Massachusetts lawmakers discovered in 2014.

Hat tip to AASHTO Daily Transportation Update

Monday, July 17, 2017 in WUWM (Milwaukee Public Radio)

Rendering of electric scooters, electric cars, light rail train, and apartments in background.

Arizona’s ‘Car-Free’ Community Takes Shape

Culdesac Tempe has been welcoming residents since last year.

February 14, 2024 - The Cool Down

Aerial view of suburban sprawl with large single-family homes near Dallas, Texas.

The Changing Shape of American Suburbs

Housing costs and availability are pushing more American households, including young families, to suburbs and exurbs — and they’re demanding changes.

February 13, 2024 - Business Insider

Aerial view of New York City architecture with augmented reality visualization, blue digital holograms over buildings and skyscrapers

4 Ways to Use AI in Urban Planning and City Design

With the ability to predict trends, engage citizens, enhance resource allocation, and guide decision-making, artificial intelligence has the potential to serve as planners’ very own multi-tool.

February 20, 2024 - ArchDaily

Google street view of wide grassy median in Beverly Hills, California.

Beverly Hills Installs First ‘Green Street’

A three-block median featuring native plants and bioswales is part of the city’s broader effort to reduce water consumption and pollution.

February 22 - Beverly Press

Habitat for Humanity volunteers in construction helmets buildign a wood-frame house.

Habitat for Humanity and Missoula Land Trust Team up on Affordable Housing

The partnership will ensure the new homes will remain affordable for future buyers.

February 22 - KPAX

Orange California poppies in bloom over gently rolling hills in Southern California's Antelope Valley Poppy Reserve.

Experiencing California's Antelope Valley Poppy Reserve

Located in the western Mojave Desert, this stunning state natural reserve is renowned for its breathtaking displays of California poppies and has even been referred to as California's most beautiful place.

February 22 -

News from HUD User

HUD's Office of Policy Development and Research

The Walkable City

Harvard GSD Executive Education

New Updates on PD&R Edge

HUD's Office of Policy Development and Research

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.